"Lack Of Core" Will Intensify The Game In Semiconductor Business Cycle At Least Next Year

In the face of the complex situation of core shortage, all forecasts are changing dynamically. At present, the consensus in the industry is that the chip shortage will last at least until next year, and the structural shortage in the semiconductor industry will be normal.

In various industry conferences, the lack of core is also a topic to be discussed. On June 9, Ju long, global vice president of semi and President of China region of semi, said at the world semiconductor conference in Nanjing: "there is a phenomenon that we only ask about the delivery time, not the price, and we must get the goods regardless of the cost. At present, the shortage of semiconductor production capacity is comprehensive. From the most advanced nodes to some materials, even the substrate for packaging and testing is in short supply, and the display is also in short supply. "

According to the 21st century economic report, some chip design enterprises have not been able to tape because they can't get the capacity schedule of wafer factories and packaging plants. Some practitioners say that some packaging factories only accept orders in two years.

This round of special shortage problem started from the shutdown of automobile factories. In the case of automobile sales decline in the previous two years, the automobile related orders of wafer factories were already decreasing, so the allocation of relevant production capacity (mainly medium and low-end mature production capacity) was also reduced. After the epidemic, the industrial chain was worried about the decline in demand, which further covered up the capacity problem. However, the demand for automobiles, 5g, cloud computing and IOT began to rebound, but the mature capacity was insufficient. Coupled with the trade war, hoarding and other factors, supply and demand have been unbalanced since the chain reaction.

According to alixpartners, a global core shortage will result in a revenue loss of $110 billion (about 714.5 billion yuan) for car manufacturers in 2021, exceeding previous expectations of $61 billion. In terms of production, alixpartners predicts that global car manufacturers will reduce production by 3.9 million vehicles this year, accounting for about 4.6% of its forecast total production of 84.6 million vehicles in 2021.

In addition to the automotive industry, according to the Goldman Sachs report, the lack of core has affected 169 industries in the industry chain. It also shows the importance of a small chip. Therefore, countries are increasing investment in the semiconductor industry and establishing a complete local industrial chain.

Capacity orders to 2023 semiconductor continues to boom

Behind the chip shortage is the shortage of capacity, especially the mature capacity of 8 inches and 12 inches. In the first quarter of this year's financial report, TSMC president Wei Zhejia said that the capacity shortage will continue throughout the year, and may continue to 2022.

An executive of a chip company told the 21st century economic report: "now go to some wafer factories to ask for production capacity (scheduling), which will be arranged until 2023. Even if the price rises actively, it can't be bought because the production capacity is too tight, and the increase of new quotation is not easy to predict. And the wafer factory itself is also adjusting production capacity, will cut down some of the lower profit products, retain the high profit part

Whether it's chip manufacturing or packaging and testing, production capacity is still fierce, and the industry "black swan" still appears frequently. Recently, due to the impact of the epidemic situation in Southeast Asia and the epidemic situation in Taiwan, semiconductor wafer and packaging production capacity has become increasingly tense. On June 7, the semiconductor packaging and testing giant Jingyuan electronics released the latest announcement, saying that due to the impact of the epidemic, based on the original expectation of June's revenue and considering the backwardness of the output after load reduction, it is estimated that the impact on June's revenue is about 30% - 35%, and there should be no significant impact on the financial business of the whole year.

On the one hand, the downstream terminal manufacturers are seriously affected by the lack of core. Even if only one chip with uncomplicated technology is missing, they can not deliver in mass production. Taking the mobile phone industry as an example, supply chain supply has been reduced; On the other hand, semiconductor enterprises are ushering in a boom period of high demand. Semi predicts that by 2022, the semiconductor industry will achieve three years of continuous growth and usher in a super cycle.

Julong said that semiconductor's growth continued this year, with an expected growth rate of 15% - 20%, "this quarter and the next quarter are very likely to reach 20% growth, and there will be some slowdown in the second half of the year. Semiconductors (market size) should exceed $500 billion this year. We had predicted next year or the year after (to $500 billion), but this year we will reach this new milestone. "

He specifically said that global semiconductor manufacturers will continue to increase the production capacity of 8-inch wafer plants from 2020 to 2024, with an increase of 950000 pieces / month, an increase of 17%, to a new historical record of 6.6 million pieces / month. Among them, China accounted for the majority of 8-inch wafer production capacity in 2021, accounting for 18%; The total scale of semiconductor equipment market will reach about 71 billion US dollars in 2020, and it is expected to jump to 90 billion US dollars in 2021. The three market segments (WFE, test, a & P) will achieve more than 20% growth. The growth in 2021 will continue to be driven by digital transformation.

From the enterprise level, both wafer manufacturers, IDM plants, automobile factories and parts suppliers are accelerating the expansion of production capacity.

Global semiconductor industry game intensifies

While the scale of semiconductor industry is growing, the competition among big countries is becoming more intense. As the embodiment of national comprehensive science and technology level, chip industry has become the place of global core economy. The latest research report "semiconductor shortage stimulates global and national investment plan" released by strategy analytics points out that semiconductor shortage promotes a new round of large-scale investment for countries to realize self-sufficiency.

The report pointed out that the combined effect of a series of factors, such as earlier than expected recovery of demand in automobile and other market segments, epidemic driven demand, insufficient investment in wafer foundry capacity, insufficient inventory, double orders and natural disasters, have led to a shortage of semiconductors, prompting many countries to launch large-scale investment competitions to ensure supply.

On the one hand, it directly invests huge amounts of funds to attract semiconductor enterprises to invest in China. In May, the United States, South Korea and Japan intensively issued new policies to build the semiconductor industry chain. The United States plans to invest 52 billion US dollars, while the radical South Korea directly throws out 450 billion US dollars. Japan will expand the existing fund scale of 1.84 billion US dollars, Together with the 145 billion euro (about 176.6 billion US dollars) in two or three years proposed by Europe last year, the total funds of these four regions have reached about 680.4 billion US dollars, and the number is still rising.

On the other hand, the United States has also adopted legal measures to strengthen the semiconductor manufacturing industry in the United States. In early June, the U.S. Senate of the U.S. Congress passed the U.S. innovation and competition act of 2021. It is reported that the planned funds of the bill reach 250 billion US dollars (about 1600 billion yuan). According to the Research Institute of semiconductor industry, the bill is an alternative amendment to the endless frontier act, which aims at China, and is another heavy bill of the United States against competitors.

According to xinmou research and analysis, in the short term, the capacity in the construction process will have a significant impact on China's semiconductor industry. First, global equipment capacity is tight and prices are rising. Even the United States will "window guide" international equipment enterprises to tighten the supply to China and give priority to the supply of new American projects. During the construction of domestic projects, equipment prices may rise or even be out of stock; Secondly, the supply of international talents for chip manufacturing will fluctuate, causing trouble for domestic enterprises to attract talents overseas.

The core research further points out that due to the launch of the chip manufacturing project in the United States, the environment of its semiconductor industry has greatly improved, and some international enterprises will switch to the U.S. market, resulting in reduced investment in China. In addition, foreign enterprises in China may also change, their positioning in China will change from R & D service to after-sales support, and the contribution of international enterprises in China's technology spillover and personnel training may be reduced. As the number of international enterprises entering the United States increases, the United States may form an industrial alliance and issue technical standards to further isolate China. In view of the huge market in China, international enterprises have to bet on both sides and may adopt a dual system within the company.

Many chip people told reporters that China has a huge market. Even if Europe and other regions are expanding semiconductor investment, their demand is far less than that of China. We should seize the market advantages, strengthen the local semiconductor industry chain, play the leading role of core manufacturing enterprises in the industrial chain, and attract more international enterprises.

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